Greenfield Site Operations - Case Study Example

Greenfield Site Operations Table of Contents Executive Summary 3 Assumptions 3 Introduction 4 Body 4 Environment 4 Planning 7 Organization and Leadership 7 Strategic Partnerships 9 Quality Control 10 Conclusion 11 Recommendations 12 Works Cited 14 Executive Summary The setup and launch of a new production facility requires careful planning and a complete analysis of the given situation before any move is made towards the establishment of a plant. The external environment in this particular case is slightly hostile since the locality is such that the people of the town may be opposed to big industrial plants. Additionally, HR related problems may also be faced by the company due to the lack of local availability of key players. Despite these problems, the company can handle all of their issues if they plan the new plant carefully and obtain HR from other locations. Similarly, local partnerships and strategic alliances can also help improve relationships with local communities which would eventually be beneficial for all parties rather than create an air of hostility. Additionally, the company is also advised to keep a continual check on the progress of the situation at least during the early stages of the development and operations of the plant. Assumptions The name of the company is ACME manufacturing and they are engaged in creating parts for the automobile industry. There are no current legal barriers in creating or starting operations on the new plant. The company is financially stable and will be ready to undertake the expansion operation soon. Introduction The expansion of a business involves a lot more than simply injecting money into a project and hoping for the best. It requires careful planning, running adjustments and the correct application of growth strategies which ensure that certain parameters fall in line and let the business grow in a positive direction (Pettinger, 1994). Without accurate monitoring and continual watch over a new venture, the expansion can not only remain unprofitable but also become a loss center for a company which does not have a clear plan for generating revenue out of the site operations. Body Fundamentally, ACME manufacturing is looking at change as well as growth while it seeks to grow its operations on the new Greenfield location. While the board members are visibly excited about the upcoming prospects, there are also some rather pressing questions about how the plant is going to be setup and the management controls which will be required to handle any possible hostility or resentment which the locals may have towards the organization. Similarly, there are quality control based as well as HR related issues and it would be best if all the problems and their possible solutions are examined in turn. Environment The first issue which the company faces is the environment under which the new plant is to be setup and the conditions which will be faced in terms of local community relations once work begins on the plant. Local businesses and the community in general have shown some reservations against the company since it is a large business and in historical terms, large businesses have not been made entirely welcome in the region. Therefore, the first battle which needs to be won by the company has to be fought by the PR department in gaining the support of the local community. Corporate communications and PR management is not only about showing the company in a good light, in this situation it is also about showing the community in a good light. Havenstein (2005) has suggested that information can be a very useful tool when a company wants to bring about a change and ACME can certainly use information to its own advantages. This is because the placement of the plant will have benefits both for the community and the company. While the benefits to the company need not be highlighted to the people, the community benefits must be clarified and should be made known to the local people. The growth of the town, job creation, employment opportunities and benefits to local smaller businesses should be made known to the public so the resentment against big business is reduced. At the same time, the company should take up sponsorship opportunities within the town and support local charities which are working for the improvement of the city. Instead of supporting just one or two causes in a substantial way, the company can give their financial or technical support to several different area programs like adopting highways, supporting school teams, helping the local culture scene or even sponsoring local sporting events. The sponsorships for schools can even tie into the long term HR requirements of the company if the company is willing to give scholarships to local students or offer them internships in the plant to supplement their career growth as professionals (Bolton, 1997). The environment also lacks the right kind of professionals for the type of work which is done in the plant therefore there is a chance that the company will face a shortfall when it seeks to fulfill certain specialized positions from the local community (Kamoche, 1996). In this scenario, the company will certainly have to recruit from the outside in some cases but for the majority of cases the company can promote from certain personnel from within but attaching their promotion offer to a move offer to the new location. The decision to move should remain with the individuals concerned and clearly those without family ties or other bindings would find it easier to move to the new location for better positions. On the other hand, those who do not choose to move should not be penalized in any way since it is a volunteered move. Not only would this let the company mitigate some of its HR needs, it would also help to carry over the culture of the company to the new location since the people who will be coming in from within the company would be familiar with the setup, operations and management style of the organization. The change for them would be minimal and the culture would not change significantly while the management style would remain closer to theory y or theory x as it is traditionally followed in other locations where ACME operates (NetMBA, 2005). Planning The plan for the move of personnel, equipment and materials to the new plant should be based on the phased change model which means that the operation and running of the plant should be completed to its full capacity in phases. As the plant is being built, materials and non perishables should be moved to the location and as the building, machinery and the layout of the factory floor is being completed, the skeleton crew should be beefed up by placing the rest of the crew on the floor who can take the plant to its full capacity. Perhaps the most important aspect of planning is planning for contingencies since an industrial plant has many points of failure and handles a lot of equipment, chemicals or tools which can be hazardous. While insurance requirements are a simple legal requirement, the plant and the company should also make continuity and disaster recovery plans just in case (Britt, 2005). It can be expected that the plant will function as one of the primary locations for ACME therefore a significant amount of planning would include making plans on how the plan can continue functioning in case of a disaster. Organization and Leadership Since a new plant requires key decisions to be made on a daily basis, it is highly recommended that one or more of the board members with top decision making powers be delegated to work onsite until the plant is stable enough to be managed as a day to day operations by delegated individuals. This would be a temporary move and would only be necessary until the board itself decided that a delegated authority could now handle the operations of the plant. The strongest recommendation goes for a board member who has had a certain level of experience in operations management, PR, or recruitment since all of these departments would need a heavy presence at the plan during the time it is being setup and while it is operating with a skeleton crew. As more members are added to the plant as layered middle managers, senior managers or higher executives, the requirement for the presence of a board member is diminished as duties can be delegated and passed on to those individuals (Maurer, 2005). The company should also try and recruit as much as possible from the present operations since filling senior posts with company members who are currently a part of the company would certainly preserve the culture and the ethics of the company as they are maintained at other offices (Pettinger, 1994). In terms of external recruiting and even internal recruiting, the company may have to pay a premium as far as salaries are concerned since the plant is not located near a large city which is often a hub of candidates for recruitment (Bolton, 1997). Moreover, attention must also be paid to the local community while the recruitment and leadership drive is underway. Certain key individuals can be recruited from the region to act as local councils or advisors if there are no conflicts of interest between their position in the local community and they can be asked to work for the company as external consultants or advisors. For many other positions and labor intensive situations, local recruitment can both help to create friendly relations with the community and to gain allies for the plant. Whenever external recruitment takes place for workers at the plant, they must be thoroughly trained and educated (when needed) as to the proper procedures, precautions and the working rules for the plant (Welch, 2005). This is perhaps even more important when raw recruits work alongside with old hands since certain precautions may be ignored for the sake of convenience and it is up to the plant manager and the individuals in charge of safety to ensure that such situations do not occur. A control over safety goes hand in hand with a control over quality and both need to be firmly maintained. Strategic Partnerships In terms of partnerships, the first union and friends that the company needs to make are with the local townspeople since they can be quite a hindrance in the running or establishment of the plant. The local government of the area can actually stop the operations if the people of the town are not willing to let the company proceed. For this purpose, agreements need to be made with the local government for parameters under which the plant can be allowed to run without hindrance from the citizens of the area. Since ACME works with automobile suppliers, the company can ask some of its trade partners to offer discounts to car buyers in the region. Additionally, ACME’s own products can be sold at a discount to the people of the region from the plant itself if there are no regulatory controls prohibiting such direct sales. If the plant is seen as just another business running in the area then the hostility level might go down since the company would be directly seen as adding to the local economy and not withdrawing resources from it. Quality Control There are two main methods by which quality control can be established at the new plant. The first method is internal control which has the advantage of low cost and quick turnaround times since the internal quality checkers would be completely familiar with both the operations of the plant and the desired specifications of the end product. Quality can therefore be maintained by individuals who are working on quality assurance as the plant creates its output without hindering the production process. On the other hand, quality control can be made the responsibility of a third party which uses external methodologies and external audits to examine the quality of end products via random sampling (Welch, 2005). While this is time consuming and could be more expensive than the internal testing method, the benefits of using an external quality certification are quite strong. For instance the company can be assured of finding out about the slightest irregularity since the external auditor would not have anyone to offend or defend in the plant. Perhaps the best method for quality control would be a combination of both internal checks and an external audit which can take place at a random time during the year. With internal and external controls the company would be more secure when it comes to ensuring the quality of the products it is making as well as being certain about the output which is coming from the plant. However, quality controls can only be established once the plant is operational and is producing some level of output which can be checked. Conclusion The central issue for the company, the townspeople, the employees and even the customers of the business is change management. While much has been said about how change can be difficult to manage, Lewis (2001) gives an interesting look at how companies can change or drive change. He says that if people resist change; see what happens when you offer them a brand new car without any strings attached. Obviously, very few people would resist such a change and that is what the company should seek to provide. Clearly the company can not offer everyone connected to the plant a brand new car, but what they can offer is information and the idea that the plant will not be a bad thing. If people have to be transferred from one location to another, they should be told that the position is a promotion and shown the additional benefits of working at a higher position. If the community is being disturbed they should be shown the additional income their city can expect if the plant is setup in their city and not elsewhere. At every given opportunity the benefits of the plant should be clarified in terms of both individual and collective advantages which show why ACME is the only viable choice. Recommendations The final recommendations to ACME can be summarized as: 1. Examine the expansion plans as a change management scenario where the change is connected to ACME, its employees as well as the local population. 2. Use PR and corporate communications plans as well as the methods for company image management to create a positive image of the company for the people of the town. 3. Utilize local sporting events or local charities to further enhance the image of the company by showing how big business can be good for the town. 4. Make adjustments to the plan as when required depending on the ground realities and conditions which come up while the plant construction is underway. 5. One or two of the company board members should be present on site as the plant is being constructed and as it going towards full operations to take part in key decisions. 6. Recruitment for senior positions at the plant should come from other establishments owned by ACME to continue the same corporate culture. 7. Local recruitment should also be enhanced as much as possible for positions which can be fulfilled from nearby towns. 8. Training and education should be given high importance for new recruits since they may not be completely familiar with the way operations are handled at ACME. 9. The company can also use its strategic partnerships with its suppliers or clients to help the setup process at the new plant. 10. Both internal controls for quality assurance and external auditors for quality checking can be used to ensure that the output is at an acceptable level with acceptable quality. Works Cited Bolton, T. 1997, Human resource management: an introduction, Blackwell Publishers, Cambridge. Britt, P. 2005, ‘Taking Steps for Disaster Recovery’, Information Today, vol. 22, no. 9, pp. 1-21. Havenstein, H. 2005, ‘CHW Takes Creative Approach to User Resistance’, Computerworld, vol. 39, no. 51, pp. 53-54. Kamoche, K. 1996. ‘The Integration/Differentiation Puzzle: A Resource-Capability Perspective in International Human Resource Management’, International Journal of Human Resource Management, vol. 7, no. 1, pp 230–44. Lewis, B. 2001, ‘Controlling change’, InfoWorld, vol. 23, no. 38, pp. 40-41. Maurer, R. 2005, ‘Taking Stock of Change Management’, Journal for Quality & Participation, vol. 28, no. 3, pp. 19-20. NetMBA. 2005, ‘Theory X and Theory Y’, Internet Center for Management and Business Administration [Online] Available at: http://www.netmba.com/mgmt/ob/motivation/mcgregor/ Pettinger, R. 1994, Introduction to management, Macmillan, Basingstoke. Welch, J. 2005, Winning, HarperCollins, New York. Read More